Archive for the ‘Economy’ Tag

Video of the Week — The Truth about the Economy   Leave a comment

Robert Reich helps you connect the dots — get the big picture!

kenne

 

The Existential Answer to the Problems of Capitalism is, There Are No Answers.   2 comments

CartoonColdbeaconCartoonColdbeacon

. . . other than using yesterday’s lessons as a place to begin.

Grand Canyon2007-08-11-41EII blogTwo years ago, while on a two-week road trip from Houston to Vegas, I begin to digest some of what I had been reading on the economy and the financial markets, which was beginning to give me reason to be concerned for our financial future. Not being a student of either, I felt a need to become more informed and directly involved in the management of our assets, which meant I had a lot to learn. To do so, I needed someone (advisory) that would not only be more client-oriented, but also be a teacher – someone who could be my mentor. I found that person in Bob McNeily. Since that time we have seen the Dow go from over 14,000 to below 7,000 — a severe drop by any definition, while managing a 28% demise of our personal financial portfolio (I’m pleased to note that this loss has been completely erased.), and the government becoming the bank of last resort.

The economy did finally fall into recession by the end of 2007. Since then real GDP has fallen by almost 4% and the unemployment rate has gone up by almost 5%. Now we are told the recession is over, but the scares on the economy remain and many questions still unanswered.

How did the experts get it so wrong?

Can they learn from their mistakes?

Will politics thwart any meaningful reform?

Are banks, even now, re-creating the conditions that lead to a near-financial collapse?

The answers to these and many others will depend on whose history you will be reading tomorrow. However, some answers can come by fast-forwarding to the past and reading what a little known economist, who studied and wrote on capitalism and why it fails, had to say. Hyman Minsky, a student of both the great depression and capitalism, predicted decades ago, the recent global financial meltdown, so accurate were his predictions that current pundits are referring to the meltdown as the “Minsky meltdown.”

“Instability,” Minsky wrote, “is an inherent and inescapable flaw of capitalism.” You can read more about Minsky’s vision in the September 13, 2009 Boston Globe article by Stephen Mihm, “Why capitalism fails – The man who saw the meltdown coming had another troubling insight: it will happen again.” Mihm writes, “Minsky did not share his profession’s quaint belief that everything could be reduced to a tidy model, or a pat theory. His was a kind of existential economics: capitalism, like life itself, is difficult, even tragic. ‘There is no simple answer to the problems of our capitalism,’ wrote Minsky. ‘There is no solution that can be transformed into a catchy phrase and carried on banners.’”

Another excellent article, “How Did Economists Get It So Wrong, “ by Paul Krugman, September 6, 2009 in “The New York Times Magazine.”

kenne

What Goes Down, Must Come Up!   Leave a comment

striphandler-11Those of you who visit this blog know that I like  ulffmorgenthaler cartoons, well, at least some of them. Often, I have said, “life is a rollercoaster — so too is the market.

kenne

Posted May 5, 2009 by kenneturner in Commentary, Information

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When it comes to information on the economy, “blog it!”   Leave a comment

No wonder newspapers are going out of business! Just remember, as with newspapers, “don’t believe everything you read . . .!”

http://www.ritholtz.com/blog/2009/04/financial-pugilism-and-offbeat-analysis/

Be smart!

kenne

Posted April 24, 2009 by kenneturner in Commentary, Economy, Information

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Banks: “Do as I Say, Not As I Do!”   1 comment

san-antonio-april-2009-6139-fb1Old Alamo Bank Lobby, San Antonio, Texas

“Trust binds the Nation Together;” Thrift Drives the Nation Tomorrow” — two banking principles misused and exploited.

kenne

Posted April 23, 2009 by kenneturner in Commentary, Economy, Photography

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Frontline’s “Inside the Meltdown”   Leave a comment

Tonight’s Frontline had a very informative report on what caused the current economic crisis, “Inside the Meltdown.” Click here to see it online.

kenne

Posted February 17, 2009 by kenneturner in Information

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Will the Stimulus Package Work?   Leave a comment

Here’s an opinion that says, “YES!”  And it will pay for itself. If you want to know now, click here.

kenne

Posted February 16, 2009 by kenneturner in Commentary, Information

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A Sign of The Times   Leave a comment

striphandlerWulffmorgenthaler.com

Posted February 8, 2009 by kenneturner in Life

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Have Very Low Fed Rates Done The Job?   Leave a comment

Small Banks Doing Business As Usual — Lending

Posted by Barry Ritholtz 08 Feb 2009 12:15 PM PST

Barry found a quote from Adrian Van Eck, which points out that “…most small banks are run the way banking used to be done and is supposed to be done. They take money in from savers-depositors.”

kenne

Posted February 8, 2009 by kenneturner in Information

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Increasing Unemployment Benefits Helps Stimulate The Economy!   Leave a comment

Government Spending Stimulates the Economy

There are many who believe that including provisions for welfare programs in a stimulus package would not stimulate the economy.  Not surprisingly, many economist, including Congressional Budget Office (CBO) director Douglas W. Elmendorf and Mark Zandi, the chief economist and co-founder of Moody’s Economy.com, who was reportedly a McCain campaign economic adviser — have stated that, in Zandi’s words, “aid to financially-pressed state governments” is an “economically potent stimulus.”

In testimony before the House Committee on Small Business, July 24, 2008, Zandi included with his written testimony the following chart:
burnett-20090129_

You can see that “General Aid to State Governments” would boost real GDP by $1.36 for every dollar spent, while “Extending UI [unemployment insurance] Benefits” and providing a “Temporary Increase in Food Stamps” would increase real GDP by $1.64 and $1.73 per dollar spent.

Posted February 7, 2009 by kenneturner in Commentary, Information

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Educate for Growth   Leave a comment

“For centuries, people have worried that economic growth had limits — that the only way for one group to prosper was at the expense of another. The pessimists, from Malthus and the Luddites and on, have been proved wrong again and again. Growth is not finite. But it is also not inevitable. It requires a strategy.”

Want to learn more about today’s economy and a possible fix, chick here.

kenne

Posted February 1, 2009 by kenneturner in Commentary

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There Are No Quick Fixes!   Leave a comment

1-feb-6Believe me, there are no quick fixes!

kenne

Posted February 1, 2009 by kenneturner in Commentary

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What To Do?   Leave a comment

fed-rate-zero

Don’t save, spend your money!

Don’t spend your money, save!

Don’t save, spend your money!

Don’t spend your money, save!

Don’t save, spend your money!

Oh, you don’t have any money?

How about -1% financing?

kenne

Posted January 28, 2009 by kenneturner in Commentary

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Brace Yourself for More Pain   Leave a comment

ACADEMIC PAPERS ON THE ECONOMY AND finance are for the most part like uncooked oatmeal — hard to digest.” As we try to make sense of how we got to where we are and what tomorrow holds for us, Alan Abelson writes in yesterday’s Barron’s about a recent study that sees more bumps ahead for the economy and the market. The study bears the title, “The Aftermath of Financial Crises,” and it’s by Kenneth Rogoff of Harvard and Carmen Reinhart of the U of Maryland. A good read and may be helpful in trying to put into perspective that might assess us in adjusting to what will likely be a protracted resession for the next three to four years.

kenne

Posted January 25, 2009 by kenneturner in Commentary, Information

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Answers to the Future Are In Our Past   Leave a comment

jefferson_2Banks’ Fictitious Capital

This is an excerpt from a Thomas Jefferson letter in 1819. Sound familiar?

kenne

Posted December 14, 2008 by kenneturner in Information

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